Energy Performance Certificates (EPCs) in the Private Rented Sector

Information and advice on the requirements for EPCs in privately rented properties. This page also contains details of legal obligations for PRS landlords under the recently introduced Minimum Energy Efficiency Standards Regulations (MEES).

What is an EPC?

An Energy Performance Certificate (EPC) measures the energy efficiency of a property on a scale of A-G. They were introduced in England and Wales in 2007 and are a legal requirement for a building to be sold, let or constructed. Once obtained, an EPC is valid for 10 years. The most efficient homes - which should have the lowest fuel bills - are in band A. The Certificate also tells you, on a scale of A-G, about the impact the home has on the environment. Better-rated homes should have less impact through Carbon Dioxide (CO2) emissions. The average property in the UK is in bands D-E for both ratings. The Certificate includes recommendations on ways to improve the home's energy efficiency to save you money and help the environment.

An EPC is required as follows:

  • Individual house/dwelling (i.e. a self-contained property with its own kitchen/bathroom facilities) - one EPC for the dwelling.
  • Self-contained flats (i.e. each behind its own front door with its own kitchen/bathroom facilities) - one EPC per flat.
  • Bedsits or room lets where there is a shared kitchen, toilet and/or bathroom (e.g. a property where each room has its own tenancy agreement) - No EPC is required.
  • Shared flats/houses (e.g. a letting of a whole flat or house to students/young professionals etc. on a single tenancy agreement) - one EPC for the whole house.
  • Mixed self-contained and non-self-contained accommodation - one EPC for each self-contained flat/unit but no EPC for the remainder of the property.
  • A room in a hall of residence or hostel - no EPC is required.

What is the minimum level of efficiency? Are grants available to help me fund improvements?

From 1 April 2020, all domestic lettings (including existing) must achieve an “E” rating or better. On the 4th September 2020 the Government announced that landlords will be eligible for grant funding to improve energy efficiency at their properties. Click here for further details of the Green Homes Grant scheme

Are Houses in Multiple Occupation (HMOs) included?

Not necessarily. An EPC is required as follows:

  • Individual house/dwelling (i.e. a self-contained property with its own kitchen/bathroom facilities) - one EPC for the dwelling.
  • Self-contained flats (i.e. each behind its own front door with its own kitchen/bathroom facilities) - one EPC per flat.
  • Bedsits or room lets where there is a shared kitchen, toilet and/or bathroom (e.g. a property where each room has its own tenancy agreement) - No EPC is required.
  • Shared flats/houses (e.g. a letting of a whole flat or house to students/young professionals etc. on a single tenancy agreement) - one EPC for the whole house.
  • Mixed self-contained and non-self-contained accommodation - one EPC for each self-contained flat/unit but no EPC for the remainder of the property.
  • A room in a hall of residence or hostel - no EPC is required.

Generally HMO’s fall into category 3 and therefore an EPC is not required for each unit. However we do recommend you check the definition of your property carefully when deciding if and EPC is required.

Where individual rooms in a building are rented out and there are shared facilities (eg kitchen and/or bathroom), an EPC is not required. This because an EPC is only required on the rental of a building or part of a building designed or altered to be used separately. Renting a room does not meet the ‘part of a building’ definition.

Example 1: A house or flat is rented by a number of tenants who have exclusive use of their bedrooms but share a kitchen and bathroom. In this case each tenant has a contract with the landlord for the parts they have access to, but not for a whole dwelling. An EPC is therefore not required each time a tenant moves, although one will be required for the whole house if it is sold, rented as a whole or constructed.

Example 2: A group of friends rent a property and there is a single contract between the landlord and the group as the contract is for the rental of a whole dwelling. An EPC is required for the whole dwelling.

Example 3: Individual tenants rent rooms in a hall of residence. Each room does not constitute a building or part of a building designed to be used independently or separately. An EPC is not required, for each individual room. However, an EPC will be required on the whole building if it sold, rented or constructed. It will also be required on self-contained units within the hall, eg a self-contained caretaker’s flat, if this is sold, rented or constructed.

HMOs are not excluded from the Energy Efficiency (Private Rented Property) (England and Wales) Regulations 2015. The Regulations apply to all privately rented properties that are legally required to have an EPC, and where rooms are let on one of the qualifying types of tenancy (most likely assured tenancies). An HMO will be in scope where it meets these criteria.

However, individual rooms within HMOs are not required to have their own EPC, so a property which is an HMO will only have an EPC if one is required for the property as a whole (typically this will be if the property has been build, sold or rented as a single unit at any time in the past 10 years). If a HMO is legally required to have an EPC, and if it is let on one of the qualifying tenancy types, then it will be required to comply with the minimum level of energy efficiency.

HMO requirements are on a case by case basis, so check your specific circumstances carefully.

How do I get an EPC?

To find an EPC assessor click here. They will assess your property and produce the certificate. 

How much does an EPC cost?

An EPC can cost between £60 and £120. As the cost can vary, it is worth shopping around and comparing a few different quotes — as long as you make sure your assessor is registered. You can often lower the energy performance certificate cost by getting your assessment done directly rather than through an estate agent. You can find an assessor in your area by checking on the EPC register.

My property is currently rated below Band E. What action should I take?

From the 1st April 2020, Landlords can no longer continue to let properties covered by the Domestic Minimum Energy Efficiency Standard (MEES) Regulations if they have an EPC rating below E, unless they have a valid exemption in place (click here for further info on MEES exemptions). If you are currently planning to let a property with an EPC rating of F or G, you need to improve the property’s rating to E, or register an exemption, before you enter into a new tenancy. If you are currently letting a property with an EPC rating of F or G, and you haven’t already taken action, you must improve the property’s rating to E immediately, or register an exemption. If your property is currently empty, and you are not planning to let it, you don’t need to take any action to improve its rating until you decide to let it again.

Can an EPC save me money?

As well as telling you what measures to undertake, new EPCs give details on the potential cost of upgrading your heating, lighting and water. Additionally, it also tells you the savings you can make on your bills after you’ve made the upgrades, to give you a cost comparison as well as the total savings you can make on your property and the EPC rating you would receive after completing the upgrades. You’ll also be able to see the total savings you could make on your property and the EPC rating you’ll receive after the upgrades. Additionally, the MEES is good news for tenants because it should see energy costs become lower in the long run. With better insulation, more energy-efficient lighting and other measures taken to improve the energy efficiency of the property, you should end up paying less in energy costs. However, you should still ensure that you're switching your supplier whenever you feel as though you may be paying too much for your gas and electricity.

What happens if I don’t get an EPC or I continue to let a property which does not meet the Minimum Energy Efficiency Standard?

The MEES Regulations are enforced by local authorities, who have a range of powers to check and ensure compliance. If a local authority believes a landlord has failed to fulfil their obligations under the MEES Regulations, they may serve the landlord with a compliance notice requesting information to assist them in establishing whether a breach has occurred. If a breach is confirmed, the landlord may receive a financial penalty. A compliance notice may request information on:

  • The EPC that was valid for the time when the property was let
  • The tenancy agreement used for letting the property
  • Information regarding energy efficiency improvements made 
  • An Energy Advice Report in relation to the property

If a local authority confirms that a property is (or has been) let in breach of the Regulations, they may serve a financial penalty up to 18 months after the breach and/or publish details of the breach for at least 12 months. Local authorities can decide on the level of the penalty, up to maximum limits set by the Regulations. The maximum penalties amounts apply per property and per breach of the Regulations. They are:

  • Up to £2,000 and/or publication penalty for renting out a non-compliant property for less than 3 months
  • Up to £4,000 and/or publication penalty for renting out a non-compliant property for 3 months or more
  • Up to £1,000 and/or publication for providing false or misleading information on the PRS Exemptions Register
  • Up to £2,000 and/or publication for failure to comply with a compliance notice
The maximum amount you can be fined per property is £5,000 in total.

Where there is a requirement to provide an EPC, if a landlord does not provide a tenant with a copy of the EPC at the start of a tenancy agreement they are not be able to serve a tenant with a Section 21 eviction notice should they need to.

 

 

 

Last updated: 04 December 2020 10:51:47